Stock Futures Decline Despite Strong JPMorgan, Wells Fargo Reports

A breather looks to be in order after Thursday's mammoth gains.

NEW YORK ( TheStreet) -- U.S. stock futures were pointing lower early Friday despite strong earnings reports from two of the big banks.

Speculation about a stronger than anticipated GDP report from China that failed to come to pass was overshadowing the good news from JPMorgan Chase, Wells Fargo ( WFC). Instead of an upside surprise, China reported its slowest pace of economic growth in three years.

Futures for the Dow Jones Industrial Average were tumbling 68 points, or 44.6 points below fair value, at 12,882. Futures for the S&P 500 were down 7.4 points, or 4.9 points below fair value, at 1379. Futures for the Nasdaq were falling 11.3 points, or 8.9 points below fair value, at 2728.

China's first-quarter gross domestic product slowed to 8.1% from a year earlier, the slowest rate of growth in nearly three years, from 8.9% the previous quarter. That was a big miss on the 9% figure traders were passing around Thursday and put a damper on hopes that the report would offset concerns over signs of a slowing U.S. economic recovery and the stresses in Europe.

The slowdown was attributed to weakness in export growth and the construction sector, while investment and domestic consumption supported growth.

Commodities were sliding and the 10-year Treasury was climbing after the report.

May oil futures were down 40 cents to $103.24 a barrel, while June gold futures were losing $6.30 at $1,674.30 an ounce.

The benchmark 10-year Treasury was up 10/32, diluting the yield to 2%, while the U.S. dollar index advanced 0.2%.

North Korea's launch of a long-range rocket was adding to the edginess of the markets. The rocket exploded as it took off and failed to deliver a satellite into orbit.

In U.S. economic news on Friday, the Labor Department said Friday that the consumer price index for March rose 0.3%, compared with a gain of 0.4% in February. Gasoline prices were the biggest gainer and main reason behind the 0.3% increase. Stripping out the volatile food and energy components, the core figure rose 0.2% for March, compared with an increase of 0.1% in February. Both the core and headline data matched expectations exactly.

The University of Michigan's gauge of consumer sentiment for April will be released at 9:55 a.m. ET. Economists in a Thomson Reuters survey expect a reading of 76.2, a repeat of the final March reading.

In corporate news, JPMorgan said strong investment banking results and an improvement in mortgage banking revenues powered profits in the first quarter.

The nation's largest bank by assets and deposits reported net income on a managed basis of $5.38 billion or $1.31 per share, down slightly from $5.55 billion or $1.29 per share in the year-ago quarter. In the fourth quarter, the bank posted a net income of $3.7 billion or 90 cents per share.

Profits included several one-off items including a $1.8 billion pretax benefit from reduced loan-loss reserves, a $1.1 billion pretax benefit from WaMu's bankruptcy settlement, which was offset by a $2.5 billion pretax expense for additional litigation reserves and a debt valuation adjustment loss of $0.9 billion- an accounting loss incurred from tightening spreads on the bank's own debt.

Excluding items, "core" earnings per share was $1.39 per share. Revenue came in at $27.4 billion, up 6% from the year-ago quarter and 24% over previous quarter. Analysts were expecting an earnings per share of $1.18 on revenues of $24.68 billion.

The company earned $4.2 billion, or a record 75 cents a share during the first quarter, compared to fourth-quarter earnings of $4.1 billion, or 73 cents a share, and earnings of $3.8 billion, or 67 cents a share, during the first quarter of 2011.

First quarter revenue totaled $21.6 billion, beating the consensus estimate of $20.51 billion, mainly reflecting the strong mortgage origination volume. In comparison, Wells Fargo reported total revenue of $20.6 billion during the fourth quarter, and $20.3 billion, during the first quarter of 2011.

Google reported first-quarter earnings of $10.08 a share on revenue of $8.14 billion, excluding traffic acquisition costs. Total revenue came in at $10.65 billion. Revenue in the U.S. rose 22% year over year to $4.9 billion, while revenue outside the U.S. jumped 26% to $5.8 billion.

Google also said it would be creating a new class of stock, effectively issuing a stock split that is "designed to preserve the corporate structure that has allowed Google to remain focused on the long term."

On a conference call, CEO Larry Page said that many investors have asked for a stock split, and this effectively grants it to them.